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Is There a Shortage of Lithium-Ion Batteries?

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Archives, Global Logistics, Global Trade Daily, International Trade

Is There a Shortage of Lithium-Ion Batteries?

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The wider availability of electric vehicles has played a major role in getting more people interested in them. However, analysts warn that a lack of lithium-ion batteries could stifle the surge in electric vehicle adoption.

Here’s a closer look at the matter and some details about the possible associated issues that could affect fleet owners.

Rising Electric Vehicle Usage Causes Elevated Materials Demand

The electric vehicle has experienced recent success that seems unlikely to wane. For example, a global electric vehicle report confirmed there were 2.1 million electric vehicles sold in 2019, which surpassed the previous year’s numbers by 6%.

However, the interest in those automobiles has been far more long-term. The report clarified that there were only 17,000 of them on the world’s roads in 2010. The total soared to 7.2 million by 2019.

Another section of the report goes into the materials required to make batteries for electric cars. The cars sold in 2019 required an estimated 65 kilotons of nickel, 22 kilotons of manganese, 19 kilotons of cobalt, and 17 kilotons of lithium.

However, the report estimates those amounts will rise substantially by 2030 due to ongoing interest in electric vehicles. More specifically, it could increase to at least 925 kilotons of class I nickel, 185 kilotons of lithium per year, 180 kilotons of cobalt, and 177 kilotons of manganese.

A Heavy Dependence on Imports

Most analysts agree that there is not an immediate shortage of lithium-ion batteries, but concerned parties should respond quickly to mitigate the possible effects. One reality is that many nations, including the United States, rely heavily on China to supply battery materials.

A February 2021 executive order from The White House involves looking at current supply chain risks in the United States, then exploring measures to tackle those issues. Batteries were not the only goods mentioned in the document, but the content specified examining concerns associated with critical metals.

Estimates suggest that China accounts for between 70% and 77% of the world’s rare earth elements. Moreover, that country owns most of the processing facilities, even if the source material comes from other places.

As recently as 2019, people became particularly concerned about those realities when tensions rose between the U.S. and China due to a trade war. Experts suggest that building more battery factories in the U.S. is an actionable strategy for lessening the nation’s need for Chinese exports.

That approach would also mean the batteries could travel shorter distances. Shipping the batteries from overseas requires the appropriate risk mitigation strategies, such as transporting them in explosion-proof refrigerated containers.

Domestic manufacturing makes sense, but it’s also not a quick strategy. Since the anticipated lithium-ion battery shortage hasn’t happened yet, there’s still time to figure out what to do when it does. Building factories will likely become part of a multipronged strategy.

Electric Vehicles Make Sense for Fleet Owners, Study Suggests

Outside of the threat of a battery shortage, other factors may cause commercial fleet owners to balk at the prospect of upgrading to all-electric models. However, a recent Berkeley Lab study illustrated some of the potential payoffs.

For example, researchers used current battery cost data and calculated that an electric long-haul truck gives a 13% per-mile decrease in ownership costs compared to the same kind of vehicle that uses diesel. The team also confirmed that electric fleet owners could achieve a net savings of $200,000 over a truck’s lifespan.

They confirmed that aspects like battery price drops and more aerodynamic designs for commercial trucks could slash the per-mile ownership costs by as much as 50% by 2030. The researchers believe that a significant shift from diesel to electric-powered fleets would cause a major reduction in greenhouse gas and particulate matter associated with the transportation sector.

A Battery Shortage Could Increase Buyer Costs

Electric commercial vehicles are still in the minority. It could take a while before that changes, but adoption rates should rise as more decision-makers see examples of successful electric commercial vehicle usage.

Analysts point out that electric vehicles could become about $1,500 more expensive if nickel prices eventually reach a historic high of $50,000 per tonne, though. That possibility could discourage fleet owners if they don’t take overall cost reductions into account.

Elsewhere, a 2019 study of American adults found that 60% cited high upfront costs as a negative aspect of electric vehicle purchase. Relatedly, 84% did not know whether their state offers incentives to offset those buying decisions. Promoting the availability of such programs could make electric vehicles more attractive.

Manufacturers Grapple With Assorted Supply Chain Challenges

Recent coverage also indicates that dealing with lithium-ion battery shortages could be more complicated than it first seems. Contrary to popular belief, there is not a lithium shortage, but rather a surplus. More specifically, Australia, which is among the top producers of lithium, has approximately double the number of mines now as in 2015.

However, certain places — such as the United States — have a lithium shortage compared to other nations. While the U.S. has small lithium deposits in California, they’re much smaller than those in South America and Australia.

A cobalt shortage is a more pressing concern, especially since most of it comes from the Democratic Republic of Congo. Cobalt is one of the most expensive components in an electric vehicle battery, and research suggests there’s not enough mining and processing capability to meet growing demands for it. This example shows that a cobalt shortage could relate more to the capacity required to reach the resource rather than the scarcity of the material itself.

A Dramatic Scaling of Resources

Celina Mikolajczak, vice president of battery technology at Panasonic Energy of North America, noted that lithium-ion battery technology features in numerous consumer devices. However, it’s not at the level required for electric vehicles.

She pointed out that whereas a laptop battery has a dozen cells, one for an electric vehicle has thousands. “How do you quickly scale an industry by 100 times?” she asked, before clarifying, “You need more raw materials, the skilled talent, and machines to extract the raw materials, the factories to process the raw materials into cell components, and then the factories to turn those components into cells.”

A related issue is that the parts required for a car with an internal combustion engine are not the same as those for an electric automobile. Electric vehicles have fewer parts, and the differences mean that a manufacturer could not swiftly pivot to making them after formerly producing autos with engines.

A strategy deployed by companies like BMW and Volkswagen is to invest in battery technology companies. Doing that could give them better access to emerging technologies compared to competitors that didn’t provide such support. That could prove crucial for business models concerning batteries made with more widely available resources. Tesla took another approach by entering long-term agreements with suppliers. Such arrangements allow better pricing.

A Complex Matter

A lithium-ion battery shortage could affect consumers and manufacturers alike, albeit in different ways. The main takeaway for the present is that it’s not a current crisis but a looming one. Plus, there’s no single, straightforward way to tackle it.

Thus, fleet owners who are interested in future electric vehicle investments should plan for the possibility of increasing their budgets to accommodate increased upfront costs. Relatedly, it’s wise for them to stay abreast of the manufacturers that have taken proactive steps to cope with a future battery shortage. Planning now should reduce the possible ramifications later.

______________________________________________________________

Emily Newton is an industrial journalist. As Editor-in-Chief of Revolutionized, she regularly covers how technology is changing the industry.

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Archives, Global Trade Daily, Trucking

Tenstreet Market Index: What To Do When App Volumes Plummet

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A healthy interest in the driver market always ranks high on a carrier’s list. But given the tough conditions, the industry has experienced over the last year, this interest has shifted to a furrowed concern. With application volumes dropping every week and more trucks sitting vacant, the desperation for drivers means carriers are likely paying more for less in an attempt to avoid the same fate other carriers and small businesses have suffered.

What’s Causing the Drop?

It’s a combination of several factors. Clearinghouse eliminations, retirements, and early exits would have affected the industry in 2020-21 anyway. But COVID introduced unprecedented factors to the market for which it couldn’t have prepared – notably drivers who are waiting to reenter the market (possibly until vaccination numbers rise or until they can get vaccinated) and the stimulus checks that keep them comfortable while they do so.

The number one thing to remember is that you’re not alone. This is not a carrier- or service-specific shortcoming, it’s a broad drop in application volume that has impacted the entire industry. While that may bring you little comfort, there is something you can do to prepare for when drivers return.

First, let’s review the data.

Weekly Driver Activity – Last 53 Weeks

Typically, application rates tend to be high at the beginning of the year and during late spring/early summer. They gradually drop off until the holiday season, when the drop in the volume of applications tends to be most pronounced (see late November and December). Another case of seasonality explains the dip in February 2021 when the country was locked down by storms.

From the first two charts below, you can see evidence of an additional market element. While driver job-seeking activity is still significantly below pre-pandemic levels, the stimulus has managed to drop the floor out from under the situation.

This is made clearer in the second chart, in which we’ve zoomed in on the last 5 weeks. Note the last 2-3 weeks in March where the number of applications fell drastically. March 2021 still places application volume 10 or 15 points below where we were in March 2020.

Weekly Driver Activity – Last 5 Weeks

Application Activity Index

This index is derived from Tenstreet clients who have had a consistent IntelliApp volume for the past 25 months. We assigned January 2019 a value of 100 for comparison. This gives us an easy way to see rate of application activity change over the last two years while removing the impact of growth in the number of carriers using the platform. As you can see, carriers as a whole have seen a huge decline over the past year in general.

Cost Per Lead, Cost Per Full Application

As mentioned above, carriers are paying more for leads and full apps than they did just a year ago due to the more intensified driver shortage, and are likely finding that the more specific their search, the shorter their results fall. Nevertheless, cost per full application has risen +30% over the past year.

Hiring Cycle Compared to Hire Rate

This chart shows a solid inverse relationship between the number of days in your cycle and the chance that a driver will make it to a hired status. Put simply, the longer your hiring process, the more opportunities there are for drivers to drop out.

With carriers having to work harder for every candidate, it’s more important than ever that they be able to glide through your hiring process smoothly. As past data has shown, the more serious the candidate, the more carriers they are typically interacting with – so finding and eliminating any rough patches will pay dividends when the pendulum swings and application volume improves.

This process need not be overwhelming, and we can help. Start by walking through your process as a driver and making note of any bottlenecks and hiccups. Replace them with time-saving solutions, like automation and integrations. Remember, drivers will be coming out of their own slumber and will not hesitate to move swiftly on to the next carrier if they encounter any reason to think they’re in store for more hard times.

Engagement and Early Onboarding

In addition to automation and integrations, engagement in early onboarding is another way you can improve your hiring cycle to improve your chances of getting that driver in a truck. The below chart shows carriers who engage drivers with text messaging, digital forms, and digital training modules within less than a day have a 40% greater chance of getting that driver all the way to hire.

Time and drivers aren’t the only things you’ll save. The more you can move online, the more money you save on hotels, meals, and recruiter onboarding time. Carriers who onboard online experienced an immediate 20%-40% in savings when they free their onboarding processes from expensive and unnecessary activities.

Tenstreet Can Help

Just as you’re not alone in this drop-in application volume, you’re not alone in improving your hiring process. Let us help your business see a new level of success. Many of our account managers and advisors have worked for carriers like yours in the past and know how to help.

Give us a call at 877-219-9283 or email us at sales@tenstreet.com and let us help you put new strategies in place for the next surge of drivers who come your way. It’s only a matter of time.

This article originally appeared here. Republished with permission.

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Archives, Global Logistics, Global Trade Daily, Trucking

Emerging Transportation Innovations to Watch out for in 2021

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As technology continues to develop, new trends emerge. While driving AI is still not advanced enough to give us fully automated vehicles, there are other trends that stand to change the transportation industry as we know it. So, to get a better understanding of where the industry is now, let’s take a look at some of the more notable trends. Here are emerging transportation innovations to watch out for in 2021.

Emerging transportation innovations

While the pandemic has impacted the transportation industry in general, the development of new technologies hasn’t slowed down at all. People have recognized that the setbacks were temporary. Some areas of transport, like medical equipment shipping, even grew due to increased needs. So, it is fair to assume that the transportation industry as a whole will continue to develop. Seeing how there are numerous innovations in electronic vehicles, eco-friendly fuels, logistic systems, and automation still in development, we cannot cover all of them. To keep a certain sense of scale, we will focus primarily on the innovations on the rise in 2021.

V2X communication

One of vehicle technology goals is that all vehicles have constant, seamless data change with their HQ. Ideally, this will include not only things like location and speed but also vehicle state, health, and fuel. While we have not yet achieved such a high level of communication, we have made significant steps toward its development.

One of those steps is the FCC ruling in November 2020 regarding V2X (vehicle-to-everything communication). To put it simply, it requires the 5.9 gigahertz band to allocate 75 megahertz for cellular V2X communication and Wi-Fi. Initially, the FCC used this band exclusively for DSRC (dedicated short-range communication) since 1999. Cellular V2X (C-V2X) is just like V2X. The only difference is that it contains two transition modes. Vehicles use the first one to communicate with other vehicles, as well as pedestrians and infrastructures. The second one enables them to connect to the cloud network. This allows drivers to get information about available parking, potential traffic issues, etc. If you want to research it more, know that the development of the 5G internet is closely connected to C-V2X.

Federal transport funding

While the private sector knows that the effects of COVID-19 are temporary, the federal government doesn’t hold such views. Due to lack of travel in 2020 and 2021, the government has decreased funding to the transportation industry. How big of an impact this will have on the overall trading industry is hard to say. After all, commercial transport is still in high demand. Still, it is hard not to notice the substantial cut to funding.

Touchless activation

Once the COVID-19 pandemic started, one of the first things we’ve learned is that the virus can spread through physical contact. Apart from people disinfecting their hands and avoiding touching, this has also motivated the transportation industry to find as many touchless alternatives as possible. As a result, we have iDetect activation, where people can wave their hand in front of a sensor instead of pressing a button.

Furthermore, FLIR and TAPCO have partnered up to provide FLIR thermal activators for all pedestrian crosswalk systems. As the name suggests, this system uses thermal activation instead of physical contact to activate crosswalk signaling. Finally, we also have infrared bollards to help those that cannot reach the alert systems with such ease. These bollards automatically scan for vulnerable road users and set the necessary systems in motion.

License plate recognition

The final notable advancement in transportation (more specifically vehicle) technology is license plate recognition. Law enforcement especially has made great use of emerging license plate technologies in 2021. AI systems can load and check a license plate within seconds. This makes checking up on suspicious vehicles, both during the drive and while stopped, much safer, faster, and efficient. Even parking fines have become automated in certain countries as police vehicles simply drive through the city and gather info via video. Once these technologies become more available, we are sure that the logistics companies will find a good use for them. But, for now, they are more than useful for law enforcement.

What the future holds for transportation

While the emerging transportation innovations show much promise, they are only a glimpse of what’s to come. Before long, we won’t be surprised that there are individual vehicles and entire fleets of fully automated transports. We will probably first see these automated vehicles in trains and ships, as there are fewer variables to keep track of there. But, as the self-driving AI progresses, we are bound to see self-driving trucks, cars, and planes. Keep in mind that it’s in AI’s nature to develop exponentially. So, once it starts advancing, it is only going to speed up over time. Therefore, if we get rudimental self-driving AI within ten years, fully automated vehicles two years after that shouldn’t be surprising.

Logistics

Another trend to keep close track of is the development of logistics. More and more, logistics is becoming automated. After all, gathering and processing all necessary info for logistics far surpasses the capabilities of any human. While logistics managers simply use these systems to plan their routes, we won’t be surprised if logistics systems become better at planning. Remember, most logistics decisions are based on prior learning and predictions. So, the better a model we can create for logistics, the sooner the AI can start learning. And once it does, keep in mind the exponential development.

Fuel alternatives

When talking about emerging transportation innovations, it’s important to mention innovations in fuel and energy. While electric vehicles seemed impossible just a decade ago, Elon Musk proved everyone wrong with his Tesla company. While there are no huge updates in the industry, it is essential to note that it is growing. Eco-friendliness is, as it should be, a major concern for developed countries. With luck, we should see a general decrease in fossil fuels and an increase in greener options.

____________________________________________________________________

Jacob Sherman has worked in the transport industry for over 20 years, mainly helping moving companies like Zippy Shell Louisiana with logistics and planning. Now, he uses his experience to write insightful articles about the transportation industry. In his spare time, he enjoys cooking for his family and going on long hikes.

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Archives, Global Trade Daily, Special Reports

Industries With the Highest Rates of Workplace Injuries

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One of the concepts that the COVID-19 pandemic brought to the forefront of the public imagination is the idea of an “essential worker.” The pandemic highlighted that many professions are critical for allowing the rest of the economy and society to function properly, especially in a time of crisis. Some essential professionals like health workers and teachers were already held in high regard, but COVID-19 put a new spotlight on workers in oft-overlooked industries like grocery, elder care, and shipping and logistics.

Of course, the reason why these professions have drawn attention is the fact that workers in these fields kept working despite higher risks of virus exposure in the course of doing their jobs. Early on in the pandemic, many people were easily able to transition to working remotely, while many others saw their jobs eliminated or hours reduced as a result of COVID-19’s economic shocks. But essential workers mostly continued working in-person, all the while confronting the greater possibility of contracting COVID-19.

These varying experiences of COVID-19 across professions reflect the larger fact that every job has different levels and types of risk inherent in the work. Professions that involve manual labor or interacting with tools and machinery tend to be among the most prone to injury and illness, but no job is perfectly safe. Fortunately, however, the U.S. has seen positive trends in reducing the number and severity of work-related injuries and illnesses in recent years.

According to data from the Bureau of Labor Statistics, the overall number of cases per 100 full-time workers has been cut nearly in half over the last two decades, from 5.0 in 2003 to 2.8 in 2019. And this is part of a much longer-running trend that began with the creation of the Occupational Safety and Health Administration in the early 1970s. When OSHA was created in 1971, the rate of injury and illness on the job was 11 per 100 workers, but that number has been on the decline ever since thanks to OSHA and other efforts to promote workplace safety.

Lower incidences of workplace injury and illness overall have come with a parallel reduction in the number of injuries and illnesses that inhibit the ability to work. In 2003, there were 1.5 cases per 100 workers that led to days away from work. That number dipped to 1.0 in 2011 and has remained at or below that level ever since.

Despite this progress overall, the risk profile across professions continues to vary, and the data suggest that these different risk levels are also closely correlated with income. In general, industries with lower median earnings tend to see more work-related illnesses or injuries, while industries with higher earnings tend to see fewer. This situation is likely to be exacerbated by COVID-19, as many essential professions or other jobs that have continued in-person also pay lower wages than the lower-risk white-collar jobs that were able to transition to virtual work.

To identify the industries with the highest rates of workplace injuries, researchers at Construction Coverage collected data from the Bureau of Labor Statistics, including each industry’s total number of cases per 100 workers, cases resulting in missed days or job transfer/restrictions, median wage, and total employment. Industries were ranked by the total number of cases per 100 workers.

Here are the industries with the highest rates of workplace injuries.

Industry
Rank
           Total  cases (per 100 workers)
Cases with days away from work (per 100 workers)
Cases with days of job transfer/restriction (per 100 workers)
Other cases (per 100 workers)
Median annual wage
Total employment
Couriers and messengers    1      8.1 3.3 2.8 2.1 $36,890 796,660
Air transportation    2      6.5 3.7 1.5 1.2 $62,480 498,830
Wood product manufacturing    3      6.1 1.8 1.7 2.6 $34,260 406,100
Performing arts, spectator sports, and related industries    4      6.0 1.4 1.9 2.7 $37,330 519,810
Nursing and residential care facilities    5      5.9 1.7 1.8 2.4 $30,370 3,351,090
Animal production and aquaculture    6      5.6 2.1 1.3 2.1 N/A N/A
Hospitals    7      5.5 1.3 0.9 3.3 $58,210 6,094,940
Crop production    8      5.3 1.4 1.6 2.2 N/A N/A
Support activities for agriculture and forestry    9      5.2 1.8 1.5 1.9 $26,430 382,330
Building material and garden equipment and supplies dealers    10      4.9 1.6 1.7 1.6 $29,830 1,311,670
Warehousing and storage    11      4.8 1.9 1.7 1.2 $36,170 1,214,230
General merchandise stores    12      4.6 1.2 1.6 1.8 $25,310 3,129,540
Fishing, hunting and trapping    13      4.6 2.3 N/A 1.5 N/A N/A
Primary metal manufacturing    14      4.4 1.2 1.5 1.7 $44,520 385,910
Beverage and tobacco product manufacturing    15      4.3 1.3 1.6 1.4 $38,680 282,110

 

*Incidence rates represent the number of injuries and illnesses per 100 full-time workers

For more information, a detailed methodology, and complete results, you can find the original report on Construction Coverage’s website: https://constructioncoverage.com/research/industries-with-highest-rates-of-workplace-injuries-2021

IoT
Archives, Global Logistics, Global Trade Daily, Trucking

How Will Adoption of Internet of Things (IoT) Facilitate Logistics Sector?

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The expansion of the e-commerce sector, which will account for a 17% share in global retail sales by 2021, has increased the incorporation of the internet of things (IoT) technology for enhancing the logistics ecosystem. The booming e-commerce industry, on account of the changing consumer behavior, requires fast and free shipping with competitive product pricing. To keep up with this changing customer behavior, various companies have started adopting IoT solutions in their logistics activities to manage a sudden order rise, time-sensitive needs of customers, and inconsistent shipping.

The adoption of IoT solutions improves the efficiency of logistics operations, as they help in tracking the inventory and warehousing, monitoring the driver activity, allowing for smart location management, and updating the delivery status. The benefits offered by IoT technology are imperative for the success of any logistics company. This realization will, therefore, increase the IoT in logistics market size from $34,504.8 million in 2019 to $100,984.5 million by 2030. According to P&S Intelligence, the market will advance at a CAGR of 13.2% during 2020–2030.

Additionally, the rapid digitization in the logistics sector is propelling the demand for IoT solutions. Logistics and trucking companies across the globe are using data analytics, telematics, self-driving, and robotic technologies to attain operational efficiency and combat issues such as the shortage of truckers. Besides, the integration of robotics in supply chain management, data analytics, warehousing, and machine learning has helped in solving the issue of labor shortage and enhancing technical efficiency.

Furthermore, the developments in the 5G network technology will fuel the demand for IoT solutions from the logistics industry. The 5G technology will improve the experience of drivers by providing better insurance coverage for vehicles and real-time traffic updates. Moreover, this cellular network technology allows logistics companies to cut down the latency, thus ensuring higher efficiency in operations. Apart from this, the logistics industry also uses local area network (LAN) technology-based IoT solutions to improve its operations.

In the past, the North American logistics sector displayed the highest adoption of IoT solutions, on account of the rapid digital transformation in the region. Moreover, the emergence of new IT startups due to the surging internet penetration and expanding scope of e-commerce has facilitated the adoption of IoT technology in the logistics industry. Besides, a surge in advertising and marketing activities pertaining to robotics, near-field communication (NFC), low-power wide-area network (LPWAN), artificial intelligence (AI), and radio-frequency identification (RFID) technologies and an increase in the efforts to educate and train professionals in these technologies widen the scope for companies offering IoT solutions for regional logistics companies.

This will be because of the fact that blockchain for supply chain management has the ability to replace conventional processes as it uses ledger technology that makes logistics operations sustainable and ethical. Geographically, the market will demonstrate the fastest growth in Asia-Pacific in the coming years, as per the estimates of the market research company, P&S Intelligence. Rapid technological advancements in the logistics industry are the major factor fueling the expansion of the IoT in the logistics market in this region.

Source: P&S Intelligence

______________________________________________________

Rahul has around 2+ years of experience in market research and consulting services for the automotive domain. He holds varied experience in market sizing and forecasting with varied models, competition landscape, consumer behavior analysis, opportunity analysis, product/company benchmarking, data mining, and BOM costing. He has successfully delivered multiple projects in market entry and share analysis and others.

Some of the projects delivered by him include Artificial Intelligence in Transportation Market, Global Electric vehicle and Charging Infrastructure Market, and Mobility-as-a-Service Market.

transport business
Archives, Global Logistics, Global Trade Daily, Trucking

What You Need to Know Before Starting a Transport and Logistics Business

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It’s easy to break into the transport and logistics industry; the real challenge is maintaining a profitable business venture in a competitive environment. Aspiring business owners need to create a solid business plan, financing, and recruitment strategies before opening their doors to the public.

Whether you run a one-person business or operate 150 trucks, always be prepared for stiff competition. With that said, here’s what you need to know before starting a transport and logistics business:

Choose a Transport Niche

Choosing your niche means identifying your target audience and the service(s) you offer. Here are some of the categories of transport businesses you can choose from:

Personal transport. Companies that cater to individuals or small groups, like taxi companies or limousine rentals.

Local transport. Consumer goods, materials, livestock, and more fall under this category.

International transport. This refers to the transport of all categories but at a global scale. Companies that pick international transport usually offer air-based delivery or sea shipping.

Choose one niche and learn all you need to know about it. Suppose you’re not sure which niche to choose, research the supply and demand in your area. Identify a relevant problem or a need and formulate a solution. If you address a pressing issue, you’ll have a steady client base even before you open your business.

Consider the Expenses

Understanding your business’ finances increases your chances of success. For instance, you need to figure out how to fund your company. Are you planning to bootstrap? Apply for an unsecured business loan? Or ask for financial assistance from angel investors?

The Small Business Administration is a great resource for both small business owners and aspiring entrepreneurs. Before you apply for a loan, be sure to create a comprehensive business plan because many lenders ask to review your plan before approving your loan application.

You also need to consider the expenses associated with running a transport and logistics business, including fuel prices, maintenance costs, license and toll fees, insurance, and hiring and training fees. You might also want to invest in an enclosed parking space when your vehicles are off the road, as well as safety features like CCTV monitoring, alarms, dashcams, etc.

Charge the Appropriate Rate

The rate you charge determines the profit you’re going to make. It should be high enough to cover your expenses and make a profit. If you set your rate too high without a basis, you can lose potential customers to your competitors. This is why it’s important to understand your finances, calculate your expenses and conduct market research.

It’s also important to note that other companies provide the same services, not to mention competing with brokers with appealing offers. If you want to increase your price, be sure to offer added value that your customers will love, like expedited shipping or a tracking app.

Here are some of the factors you need to consider when determining the right rate:

-Type of goods transported

-Type of transportation

-Weight of the goods

-Shipping method used

-Distances and time

-Shipping routes

-Insurance

-Added value

Use Automated Tools

Thanks to today’s technological advancements, you don’t have to run your transport and logistics business manually. Every business owner knows how important it is to constantly improve transport management to stand out from the competition.

One of the ways to do so is to use a reliable internal knowledge base and transport management software. Good software allows business owners to keep all data related to transport operations in one area. It could also track shipment scheduling, including the cargo, driver, and fuel usage. This information allows business owners to save time, money, and effort.

Set a Budget

The costs of running a transport and logistics business depend on the niche you choose. For example, running a taxi company with three vehicles is cheaper than a large logistics fleet with 15 delivery vans. But regardless of the size of your company, you can plan for these expenses.

It’s important to set budget, goals and benchmarks, but here are some of the things you need to consider:

-The amount of revenue you need to maintain operations

-The amount of money you want to invest in advertising and marketing

-How much you spend on manpower, supplies, and equipment

-The amount of debt your business has in expenses and loans

What’s Next?

Running a transport and logistics business can definitely be profitable. Follow the tips mentioned above so you can enjoy a successful company amid stiff competition.

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Archives, Global Trade Daily, International Trade, Special Reports

Infographic: 2021 Supply Chain Trends

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In 2020, we saw supply chain innovations accelerate as companies scrambled to find new strategies and implement new technologies in order to navigate unprecedented market activities. There was a renewed focus on supply chain visibility and resilience, and rapid expansion into new channels.

In 2021, we’ll see more businesses rethinking how their supply chains work, and making deeper investments in new channels, digital technologies, and automation. Here are 5 ways you’ll see supply chains grow and change in 2021, courtesy of TrueCommerce.com.

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Archives, Global Logistics, Global Trade Daily

How to Effectively Communicate Your Value as a Logistics Company

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A company’s values are its ultimate selling point. Your services may be very much like every other logistics company’s, yet what will always set you apart are the values and belief system you nurture. 

The question that now naturally arises is how can we communicate this value with our customers? What are some of the marketing and PR tactics that can be employed to best showcase that deeper and more meaningful level of our business? 

After all, it’s very easy to promise you’ll store and ship item A from point B to point C in record time – and it makes you no different from your competitors.

Here’s what you can do to rise above the competition and show your customers what you’re really about. 

Know Your Target Customer(s) Deeply 

First of all, you need to truly understand what your customers are looking for. It helps if you target a very specific audience, as opposed to casting a wide net. The more specialized you are, the better you will be able to understand the unique needs of a customer. 

For instance, you may work with brands that sell a specific kind of merchandise. Let’s say this is the merch of famous social media influencers. What these kinds of clients will want is speedy shipping and a unique packaging experience, one that can be personalized to each individual influencer. 

By researching the online habits of your target audience and their requirements (via email, call, in person), you will be better able to tailor your services. You’ll have crucial knowledge to help you find that link that connects your values with their needs. 

Write Focused Web Copy 

One of the best ways to communicate with your audience is via your website copy. Ideally, you want it to focus on your customers’ needs, pain points, and desires, and how your solutions are able to solve them. Don’t go on and on about how great you are: explain how what you do solves their problems. 

Always speak in the language of your customers (which is where the research from the above point comes in). You can’t expect the same voice to appeal to international corporations and small local businesses.

Use superlative and comparative language where it makes sense. Phrases like “the most affordable,” “the most reliable,” “the longest-running,” etc. will help highlight what makes you stand out and how this can be beneficial to your audience.

Use Statistics and Social Proof 

You should also look to condense your key stats down into easily digestible bits of information. Numbers often speak louder than words. To add another layer of trust to your website, point out the number of satisfied clients you’ve worked with, the miles you’ve driven, the number of items you’ve shipped, and so on. 

Here’s an example from ShowMojo, which uses five simple statistics to underline the benefits of using their services. 

Of course, the challenge here is to top your competition. What if someone has been in business longer than you have? When this is the case, and it most often is, try to pinpoint those unique values that make you different. 

Choose to focus on one type of item or one type of service. Highlight something about your facilities that makes you stand out. Shine a light on your employees or even your customers. 

The copy you use can also be what puts you on the map. For instance, a phrase like “234 headaches averted” is more emotive than the customary “234 customers served”. 

Use Imagery to Communicate Better 

The other great way to communicate better with your audience is to use imagery and icons that strengthen your message. 

Consider every single visual element of your website: starting from the color story, to the images and the way the pages are structured. What can you improve that will make your customers both have a better experience browsing and better understand what you’re all about?

Visuals have an inherent ability to spark emotions and connections on a level that is much deeper than words. Just the use of different, better quality images that trigger a certain emotional response can improve your conversion rates. 

Your choice of imagery and visuals ties right back to knowing what your audience wants. What is the major challenge they are facing? And what are you doing that will make it better?

For instance, Haystack has a great animation that’s designed to make you feel a bit on edge at first. But then, they provide a solution in the same visual, illustrating how their services simplify operations and streamline processes.

Create Memorable Offers 

Sometimes it’s all about sticking in someone’s mind. You may not convert a visitor on the first go, but if you create a memorable offer that solves a particular need, they are likely to remember you and come back when they need that specific service. 

The future (and present) of marketing is in personalization and customization. Offers tailored to the needs of every individual customer are much more valuable and sell better than pre-made packages that only assume what they will need. 

If you’ve been in business for a while, you’ll be able to make the best of both worlds and create package-like offers that still allow for plenty of customization where it matters the most. Whether it’s storage solutions, pickup and delivery times, the duration of your services, or any other variable that can be tweaked per customer, offering a choice (but not too much of it) is what makes customers convert. 

Make sure you don’t fall into the trap of choice paralysis, and only allow your customers to tailor some elements of the offer. Too much choice and having to come up with the entire service from scratch will only cause more headache. 

Communicate Your Unique Value Proposition Wherever Possible 

Finally, you want to make sure there are numerous touchpoints between your customers and your values. Here are just four of them:

-Your web copy – Everything you write online, from your website copy to your social media captions should communicate your UVP. 

-Speaking to customers and prospects – In-person marketing is just as important as your web presence. After all, if you communicate one message online and then come off as a completely different company in person, you won’t be doing yourself much good. Ensure all company representatives are coached on the best ways of communicating your values and USPs. 

-Speaking with others in your industry – Word-of-mouth marketing is also an important aspect of customer communication. So, you want your values to shine through in your chats and emails with everyone in your industry, as well as your current customers. You never know who might send your next client your way. 

-When someone asks your employees about their job – Your staff (even the employees who don’t have customer-facing jobs) should know the values your company is built on. They can represent them when speaking to friends and acquaintances who ask them what it is they do for a living. 

Final Thoughts 

Communicating value comes down to reinforcing your core message and understanding what your audience is truly after. With enough research, a decent creative effort, and a lot of testing, you can come up with a formula that not only converts your leads but also makes them proud to be working with you. 

sustainability
3pls, Archives, Global Logistics

An Efficient Supply Chain is by Nature a More Sustainable One

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It’s C.H. Robinson’s mission to improve the world’s supply chains. We’ve been doing it for decades now. But in a world ever more conscious of the imperative to reduce carbon emissions, helping customers move their freight more efficiently has taken on new urgency.

Our customers are tackling their carbon footprint from all angles, from their facilities to the source of their electricity. They’re turning to us for help with an even more challenging sustainability goal: reducing greenhouse gases across their supply chains. With nearly 200,000 customers and contract carriers worldwide, we stand to make a significant impact on sustainability across the industry.

New technology and data we’ve launched are proving to be an accelerator of change. Now that companies can get an instant calculation of all their transportation emissions, a huge barrier is removed and the possibilities for reduction are revealed. We helped one of the largest outdoor retailers reduce their carbon output through mode conversion and purchase order aggregation, which eliminated 1,270 metric tons of emissions from their supply chain in one year – the equivalent of 3,000 barrels of oil.

Load and mode optimization, consolidation, and eliminating empty miles are some of the ways we make supply chains more efficient. As Chief Human Resources and E.S.G. Officer for C.H. Robinson, I’m proud to say that those services are also some of our most effective sustainability solutions.

For example, because C.H. Robinson’s technology is built by and for supply chain experts, we can uncover that a customer’s weekly freight from Los Angeles to Chicago is consistently seven different less-than-truckload (LTL) shipments from seven different vendors. To help the customer save money, reduce waste and achieve their sustainability goals, we can consolidate that onto one truck. That’s six cross-country shipments and a lot of emissions eliminated. More efficient. More sustainable.

Our global suite of services also provides more options. For example, if that customer has bigger shipments that are less time-sensitive, one option would be switching from trucks to rail. On average, a ton of freight can move 470 miles by rail on a single gallon of gas. More efficient. More sustainable.

Just think about the carbon reduction that’s possible in a major national retailer’s supply chain. Let’s say the retailer has hundreds of shipments going from Amsterdam to Barcelona every week, with trucks driving back empty to pick up their next load. Those are wasted miles.

Because of our global scope and scale, our supply chain experts can optimize that, too. While even the largest of retailers only has visibility into their own freight, C.H. Robinson has visibility into 19 million shipments annually. It’s an enormous information advantage for our customers. Across our vast network of contract carriers, we can identify hundreds of trucks on similar schedules going from Barcelona to Amsterdam. Pairing up that freight can eliminate those empty miles and the associated carbon emissions. More efficient. More sustainable.

In my E.S.G. role at C.H. Robinson, I have the privilege of seeing how our expertise in solving the most complex supply chain problems is creating a more sustainable future for our customers, our industry and our planet. Let us help you achieve your sustainability goals.

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Angie Freeman is the Chief Human Resources & ESG Officer at C.H. Robinson

shipper
Archives, Global Logistics, Global Shippers 101, Global Trade Daily

Be More Than a “Shipper of Choice” to Differentiate from The Competition

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Severe truck capacity shortages mixed with high freight demand continue to plague the road transportation market for shippers in 2021. As a result, shippers are having trouble maintaining pricing power and contract rate compliance in this inflationary market. According to the latest DHL Supply Chain Pricing Power Index, road carriers will retain pricing power in the transportation market for the foreseeable future.1 One major component of the index is freight tender rejections, which have jumped to a staggering 30%, further reinforcing the magnitude of truck capacity shortages.1 To combat these unfavorable conditions, shippers cannot continue to exercise a transactional approach to supplier relationship management and expect to retain service providers and grow relationships in the future.

Shippers must differentiate from the competition and go beyond the best practices of reducing detention time, providing driver amenities, implementing favorable payment terms, and tendering steady freight volume. These “Shipper of Choice” best practices should already be standard procedures for any organization today. Instead, they need to adopt a new mindset to differentiate themselves and remain competitive.

Today, manufacturers, distributors, and retailers need to be more than just a “Shipper of Choice” to grow their business and add value to their supply base. For shippers to provide real competitive value from now on, they need to address each of the following:

1. Adopt a partnership first mindset by developing a robust strategic carrier base and minimizing transactional relationships:

Shippers should continue to form deep alliances with carriers and prioritize collaboration over temporary rate cuts; it will provide a competitive advantage. In the North American truckload market, buyers often engage in transactional relationships with suppliers, operating directly from the spot market or leveraging continuous sourcing initiatives and short-term contracts. While this might temporarily raise positioning power for a shipper, it falls short as an overall approach to procurement and carrier management, ultimately harming supplier relations. Instead, strong carrier integration will provide shippers with more value opportunities such as joint ventures, cooperative savings strategies, detailed service level agreements, and optimized distribution networks. An efficient long-term partnership with a strategic carrier base nets more significant savings opportunities and helps a shipper remain innovative, profitable, and competitive.

2. Share consistent performance transparency through a voice of supplier and carrier scorecards:

Move away from a reactive approach to supplier relationship management to a strategic one by improving carrier communication and continuously refining operations. Through a “Voice of Supplier,” a carrier can provide reliable market intelligence to a shipper, including insight into how a shipper compares to the competition. Organizations should use this feedback to invest in improvement initiatives, such as internal development programs, to keep carrier turnover low and attract new service providers.

Use carrier scorecards to ensure suppliers understand where their performance ranks based on a set of key performance indicators. Then detail those metrics, especially on-time delivery and tender acceptance rate, to make immediate changes and correct recurring inefficiencies. That process helps provide a pathway to successful future interactions and strengthens a partnership. If a carrier is to remain compliant, a shipper must hold their performance accountable too. Measuring performance, such as OS&D percentage and freight allocation, will instill trust in the carrier base that a shipper will work at their improvement areas.

3. Embrace technology for improved connectivity, visibility, and communication:

Logistics companies deal with vast quantities of data simultaneously. Employing a global Transportation Management System (TMS) and Freight Bill Payment and Audit (FBP&A) program yields increased accuracy for shipment tracking, rate compliance, and freight spend visibility. They reduce rework that comes with manual process errors, allowing a shipper to streamline operations and identify more cost-saving opportunities. With the increased market volatility in the logistics industry, logistics managers must maintain real-time visibility into the flow of goods through their worldwide network. The ability to track a product’s location from the first mile to the last is now a must-do.

Application Program Interface (API) is becoming the preferred system over Electronic Data Interchange (EDI) for information exchange between shippers and carriers. Purchase orders, shipping statuses, payment confirmations, and other data sets are sent seamlessly between carrier and shipper without delay. API enhances connectivity, leverages automation, and seamlessly integrates a supply base. Carriers embrace that technology and are no longer inclined to haul for those shippers who are still reluctant to invest and adapt.

If shippers have not already, they need to begin treating carriers as core business partners. 2020 marked a year filled with uncertainty and market volatility for the logistics industry. In 2021, shippers will continue to wrestle with severe capacity constraints and will need to tackle unique challenges in the future market climate. Collaboration with suppliers makes overcoming those hurdles much easier. Employing the covenanted “Shipper of Choice” best practices is now a requirement but adopting a new supplier relationship mindset and embracing new technology will help organizations remain competitive and differentiate from the competition. 

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Alex Hayes is a Senior Associate at GEP, a leading provider of procurement and supply chain solutions to Fortune 500 companies.

Citations: 1https://www.freightwaves.com/news/stimulus-round-3-provides-huge-boost-to-consumer-economy-freight-volumes-are-next